Solution-Determine flower power cost equation

Determine flower power cost equation

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Reference no: EM132982123

Question - Alice Jungemann, owner of Flower Power, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Jungemann wants to set the delivery fee based on the distance driven to deliver the flowers. Jungemann wants to separate the fixed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. She has the following data from the past seven months:

Month	Kilometres Driven	Van Operating Costs
January	15,800	$5,460
February	17,300	5,680
March	14,600	4,940
April	16,000	5,310
May	17,100	5,830
June	15,400	5,420
July	14,100	4,880

February and May are always Flower Power's biggest months because of Valentine's Day and Mother's Day, respectively.

What is the high-low method to determine Flower Power's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 15,000 kilometers?

Reference no: EM132982123

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Determine flower power cost equation

Reference no: EM132982123

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